Loans

All news and posts of our editorial team on the topic

IMF chief: China is responsible for debts of emerging economies
International Monetary Fund (IMF) Chief Kristalina Georgieva is holding China and other major creditors accountable for the growing debt problems of emerging markets and low-income countries. “My message to the large creditors, to China, the private sectors … the larger your share is, the bigger your responsibility,” Georgieva said at an event on Tuesday hosted […] continue reading →
Central bank cuts interest rates again
China’s central bank plans to help the struggling economy, which has been hit by the real estate and Covid crises, with another interest rate cut. The one-year loan prime rate (LPR) was cut by 5 points to 3.65 percent on Monday, according to a Reuters report. The key rate for five-year loans fell by 15 […] continue reading →
US researchers reject ‘debt trap’ narrative
A new study suggests that private creditors, not Chinese loans, dominate African debt. In their paper, Harry Verhoeven of the Center on Global Energy Policy at Columbia University and Nicolas Lippolis of the University of Oxford’s Department of Politics and International Relations object to the “debt trap diplomacy” narrative (China.Table reported). “What keeps African leaders […] continue reading →
Christoph Trebesch – expert on China’s Lending Policy
He just worked for three weeks straight, says Christoph Trebesch; now he finally has some time to think again – and to spend more time with his children. He recently submitted a grant application to the European Research Council, into which he “threw everything he had”. Trebesch hopes to receive funding approval. The 42-year-old economist […] continue reading →
Financial authorities support unstable markets
China’s financial authorities are trying to stop the markets from slipping further. On the one hand, state-controlled funds are intervening in the stock market to support prices. On the other hand, the central bank is easing restrictions on mortgage lending. These measures are intended to inject fresh capital into the ailing real estate sector and […] continue reading →
Sri Lanka asks for loan deferral
Sri Lanka’s President Gotabaya Rajapaksa is pressing for a deferment in repaying his country’s debt to China. Rajapaksa said this during a meeting with Chinese Foreign Minister Wang Yi in Colombo on Sunday. Sri Lanka is currently facing a foreign exchange crisis that has brought the island nation to the brink of default. The country […] continue reading →
Report: Uganda demands amendment of loan clauses
Uganda is reportedly seeking to amend a loan agreement with China to retain control of the country’s sole international airport. The East African country had borrowed about $200 million from China Exim-Bank in 2015 to expand the airport in Entebbe, according to a report by Bloomberg.Among the clauses the Ugandan government now seeks to change, […] continue reading →
Real estate crisis spreads to Kaisa
Shares in the Chinese property group Kaisa Group and three subsidiaries were suspended from trading on Friday. Kaisa said it faces unprecedented liquidity pressure due to the difficult property market and the downgrade of its credit rating, Reuters reported. Like other property developers, the group had launched asset products and failed to make a payment […] continue reading →
Data analysis sheds light on China’s foreign aid
According to figures, China is one of the most generous donors of development aid. Or is it? An event organized by the Kiel Institute for the World Economy (IfW) provides new insights. The loans often do not have particularly favorable conditions. Moreover, there is a lack of transparency. Even Chinese officials are often unsure which funding agency grants which sums to which beneficiaries. continue reading →
‘European Integration’ as Europe’s unique selling point in Africa
Every three years, the political leaders of China and African countries meet at the Forum on China-Africa Cooperation. This is the highest-level meeting between the nations. It will be held again in November, but an exact date has not yet been set. Nico Beckert spoke with Marina Rudyak from Heidelberg University about China's lending in Africa, the New Silk Road, and African demands on China. continue reading →
Debt trap or generous foreign aid?
Is China luring other emerging markets into a "debt trap"? China's particular form of foreign aid invites misunderstanding. A thorough analysis of openly available data by researchers provides a much more nuanced picture. continue reading →
Evergrande: How much risk is Beijing willing to accept in its financial market?
Huachen Automotive was forced into bankruptcy. Bank Huarong, on the other hand, was rescued. HNA has to go through a painful restructuring. And Evergrande? The decisions to rescue or restructure ailing companies expose Beijing's strategy towards financial market risks. The dilemma faced by Chinese planners is strikingly similar to that faced by regulators in Western countries. continue reading →
HNA: Rise, fall – and rise again?
One of China's most complicated insolvency cases enters the next round: The HNA Group from Hainan in southern China is split into four independently managed business units. HNA is the parent company of the renowned Hainan Airlines, the only airline that services direct routes from Beijing to Berlin. The tourism company definitely still has a future – if it operates more frugally and efficiently in the future. continue reading →
Should Alipay be broken up?
According to a report by Financial Times, authorities want to break up fintech group Ant Group’s payment service Alipay and create a separate platform for the company’s credit business. Ant is also expected to hand over all collected user data for customer credit assessments to a new joint venture that also involves two state-owned companies, […] continue reading →
Closeout at Evergrande – bankruptcy feared
Evergrande's default is emblematic of the systemic problems Chinese real estate groups are facing. For many years, the real estate boom fueled both the country's credit and construction industries. But now the group's shares are falling to their lowest level in six years. Fears of a domino effect are running high. continue reading →
Evergrande plans to sue financial institutes
On Monday indebted real estate developer China Evergrande took a stand against further restrictions on its credit lines and other precautionary measures by several banks. The company now plans to sue Guangfa Bank for freezing company accounts worth €20 million. The bank was responding to clear signals of payment difficulties at Evergrande. China’s largest real […] continue reading →
Loan default highlights China’s real estate troubles
Chinese property developer Sichuan Languang Development is falling behind on repaying a 900 million yuan (about $139 million) domestic bond. Languang is one of China’s largest construction companies and now announced it had accumulated a total of 4,5 billion yuan in overdue debt.With its default, Languang joins the ranks of Chinese construction companies that have […] continue reading →
Report: Montenegro talks with EU about financial aid
EU candidates Montenegro and Brussels are in talks over financial aid to refinance a Chinese loan, according to a statement (as reported by China.Table). The EU Commission has reportedly approached Germany’s Reconstruction Loan Corporation (KfW), France’s state-owned development agency AFD and Italy’s sovereign lender CDP to set an aid plan for Montenegro in motion. Reuters […] continue reading →